Massachusetts Alternative Energy Portfolio Standard

Massachusetts's Alternative Energy Portfolio Standard (APS) (separate from the state RPS and EERS), requires that 5% of supplier (both regulated distribution utilities and competitive suppliers) retail sales must come from alternative energy sources by December 31, 2020. An alternative energy source is defined as one that generates electricity using CHP, gasification with capture and permanent sequestration of carbon dioxide, flywheel energy storage, paper-derived fuel sources, or energy-efficient steam technology.

CHP and other eligible projects can receive credits, referred to as "APS Alternative Energy Certificates (AECs)," for 1 MWh of electrical energy output or for thermal output (using a conversion factor of 3,412 thousand Btus = 1 MWh). The AECs "earned by a CHP Unit represent the energy saved (in MWh) by operating the Unit as a CHP Unit as compared to separately operating an on-site thermal plant while drawing electricity from the grid."

Eligible CHP units must provide for the metering of electrical energy generated, useful thermal energy produced, and fuel consumed, and for calculating the net quantity of MWh for which Alternative Energy Attributes are qualified. Further details on this calculation can be accessed at the Massachusetts Office of Energy and Environmental Affairs website.

Massachusetts APS credits were priced around $21 in 2012.

CHP Eligibility Requirements

Both natural gas fired and renewably-fueled CHP systems are eligible under the APS. Systems must have begun operation on or after January 1, 2008. Existing units can receive credit for incremental increases in useful thermal energy or useful electrical energy made on or after January 1, 2008. Systems must also meet a net CO2 emissions rate of 890 lbs/MWh.